Changing Crypto Attitudes in Japan Trigger Binance Reentry

Binance has announced that it will be renewing its pursuit to become a licensed cryptocurrency exchange in Japan following a failed attempt to do so four years ago. 

The world’s largest cryptocurrency exchange cited the nation’s easing approach to cryptocurrency, as well as the substantial potential for user growth, as reasons for reattempting its entry into the world’s third-largest economy, according to anonymous Bloomberg sources.

Meanwhile, official responses were more muted. One Binance spokesperson said “it would be inappropriate to comment on any conversations with regulators,” while an official at Japan’s Financial Services Agency declined to comment.

Binance tries again

Binance had originally planned to build a base in Japan in 2018. However, after setting up shop there, Binance received an official notice to stop operating in the country without a license, following several inquiries from the securities’ regulator.

Despite consequently pulling out, Binance received a similar warning three years later for not complying with registration rules. 

Changing times, changing attitudes

However, recent events in the East Asian country have made the company’s executives currently feel that the time is ripe for re-entry. Cryptocurrency advocates there have been pressing for changes, arguing that high corporate taxes have caused firms to relocate to Singapore. 

This led to the FSA and the Ministry of Economy, Trade, and Industry (METI) proposing more relaxing corporate tax rules for crypto assets last month.

The regulators say that the new system would consider if companies that own crypto assets will only be taxed when profits are generated from sales. 

Meanwhile, as part of his agenda for reinvigorating the economy, dubbed “New Capitalism”, Japan’s Prime Minister, Fumio Kishida, also proposed supporting the growth of Web3 firms, a catch-all term for blockchain-based platforms.

These actions on the part of Japanese authorities stand in marked contrast to that of other governments around the world, whose scrutiny of the industry, as it diminished considerably over the past year, has typically intensified.